Tuesday, November 18, 2008

Big Three head to Congress to beg

Well, today is the day of groveling for the Big Three automakers. Today the three leaders will appear before our representatives to plead their miserable cause and try to extract more monies for their cause. Nothing much has changed recently and the Senate is trying to craft a bill for an extra 25 billion dollars that can be "lent" to the automakers and auto suppliers.

Here is an update from Yahoo:

"Detroit's Big Three automakers are begging Congress for a $25 billion government rescue, while the legislation clings to life support on Capitol Hill and top lawmakers and the White House suffer from bailout fatigue.

Democratic congressional leaders want to tap the $700 billion Wall Street rescue package for new loans to U.S. auto manufacturers and suppliers, but the White House and GOP lawmakers say the beleaguered industry shouldn't get any new funds.

President George W. Bush and GOP lawmakers instead propose diverting $25 billion in loans approved by Congress in September — designed to help auto manufacturers retool their factories so they can make more fuel-efficient vehicles — to cover the firms' immediate financial woes.

But auto executives, backed by leading Democrats, insist they need another $25 billion in emergency loans to avert a collapse of one or more of their companies before year's end. That would bring the total federal help for the industry to $50 billion this year."

Sorry for the long quote but it sums up the events to data. What we see is that this extra 25 billion is the bone that will apparently keep the US automakers afloat. However, if GM is burning through 2.5 billion every month, then 8.3 billion dollars (1/3 of the 25 billion) would not last them long, do you think?

Most reports are saying that the bill for the extra 25 billion does not have much chance. What happens if they do not get any bailout funds? It looks like GM would have to declare bankruptcy by the time Obama takes office in January. Tell me what you think will happen this week!

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